Yahoo Changes Data-Retention Policy

Yahoo said today that it plans to shorten the length of time it retains data about its users' online behavior to three months from 13 months. After three months, the Internet company will anonymize that data to remove any personally identifiable information about users.

Anne Toth, vice president of policy and head of privacy for Yahoo, said the company is "putting a stake in the ground" about privacy standards. Its new policy puts pressure on competitors Google and Microsoft to make similar moves to protect user privacy.

Google has said it will make anonymous the IP addresses on its server logs after nine months, a reduction from its previous standard of 18 months. Microsoft keeps personal data about users for 18 months, but has said it would move to six months if the rest of the industry agreed to the sames standard.

Toth said it took nearly a year for Yahoo to come up with a length of time that would protect user privacy without hurting its business, which largely depends on data on online behavior to serve ads tailored to fit the interests of particular Web surfers. Yahoo said the new policy would apply to all data on its server logs, including search results, ad clicks, ad views, page clicks and page views. In an interview, she said Yahoo will also broaden its policy allowing users to opt-out of behavioral-targeting ads.

The new policy is intended to differentiate Yahoo from its competitors by building trust with users. It's also a way to show that the Internet industry can regulate itself, in hopes that regulators in the U.S. and Europe will not step in to make rules about how Internet firms can and cannot use consumer data.

Edward Markey (D-Mass.), chairman of the House Energy and Commerce Subcommittee on Telecommunications and the Internet, applauded Yahoo's new standard and urged Google and Microsoft to follow suit.

"I have been pressing online companies for greater voluntary efforts to refrain from the massive, systematic gathering of information about individual consumer Web use," Markey said in a statement.

Some consumer advocates have argued that there still needs to be more clarification about how data is used, and how it is effectively anonymized.